Victimhood Is The New Cool

Left-liberals remind me of a conversation between a man and a servant in a movie I no longer recall very well. The man tells his servant that he doesn’t know why “dog” is a cuss word. The man says he loves dogs, that dogs are the most lovable animals he’s ever known—and that he’d be honored if someone calls him a “dog”. The servant calls him just that, and gets slapped hard across his face. Left-liberals are like this man. Left-liberals don’t know elementary social science. But this is not the only reason why they don’t see themselves as cheap, little rascals. They are not introspective enough. So they are not able to see how their conscious beliefs clash with their assumptions.

Now how do their beliefs clash with their assumptions?

A few weeks ago, the Supreme Court upheld death penalty for the four convicts in the Delhi rape case. Liberals condescendingly call this girl “Nirbhaya”. Even her mother thinks there is something wrong with this. It’s a damning indictment of Indian journalism that even today, virtually all Indian journalists believe rape is not about sex. Every self-aware man knows this is nonsense. Every decent researcher who professionally handles literature on gender knows this is nonsense. Feminist dogma is not science. Activists, politicians and journalists are not scholars. It is entirely besides the point that many unhappy single women well past their prime think rape is about power. Facts lie flatly against this. All credible scholars think this is nonsense. But lame Indian journalists are convinced that rape is about power and abuse. Why does this happen? The really smart kids don’t become journalists. So, it’s not surprising you see all the shabbiness of third world self-styled intellectuals in its fully glory in Indian journalists. But why are they so bent on believing that rape is about power? There are many reasons, but this is one reason: They assume if rape has roots in male sexual desire, rape is excusable. Continue reading “Victimhood Is The New Cool”

Is The World A Good Place?

The people who read the newspapers believe that people are at each other’s throats. But, the probability of I being murdered, or your child being kidnapped is way too low. The reason is, of course, that the media discusses journalistic concretes, but not fundamental abstractions. To answer the really complex questions, we need broad empirical evidence and abstract reasoning. This is why news, especially Indian journalism is worthless. Aakar Patel claims that the world is a good place, though the newspapers might tell you otherwise.

People are not continually at each others throats. True enough. But, if we judge people as bad only if they’re at each other’s throats, we are setting the bar way too low. People are quite awful. Deception is the norm in human interactions. But, do people believe that the world is a “bad place” because the newspaper tells them so? I think not. People read news reports on deception or politicking in human subgroups as if it is “news”. It doesn’t occur to them that this is the norm, and not a transient cultural abberation. Now, why do people overestimate the risk of homicide or burglary, but underestimate the extent of deception in the market or the marketplace of democratic politics? I think David Livingstone Smith a good explanation:

“The power to deceive is our main weapon in the struggle for social survival. Like it or not, without it, we are sheep in the company of wolves. Similarly, the power to read intentions from nonverbal expressions is our best safeguard against victimization by others. Without it, we are at their mercy.”

“Immensely rapid, specialized unconscious modules are humming in the background of our minds twenty-four hours a day. We could not get along without them. We could not get manage if we had to consciously coordinate our bodily movements, choose words in a conversation, or laboriously parse streams of sound from people’s mouths into choppy words and sentences. Fortunately, our brains come equipped with pre-installed cognitive software for these tasks, and the same holds true of our ability to understand the meaning of social behavior.

“All social inferences flow from a common set of assumptions, an informal folk-psychological theory of human nature. If the theory is biased, it will deliver faulty appraisals of everyone: not only of oneself, but also of other people. Commonsense assumptions include gems of sagacity such as the notion that self-deception is abnormal, that good people do not lie, that so-called normal people are not motivated by self-interest, and that politicians aspire to serve the public. Such homilies cannot serve as a basis for sound social reasoning, but they are terrific gimmicks for Machiavellian manipulation. The knife of self-deception cuts two ways: you cannot maintain a highly distorted conception of yourself side by side with a true estimate of others.“—Why We Lie, David Livingstone Smith

As Aakar Patel points out, the homicide rate in the US is very low. But, it is still many times higher than the homicide rate in, say, Japan. There are some pretty good arguments why this is so, in Satoshi Kanazawa’s “Order By Accident”. Japan is a conformist society which punishes both criminals and geniuses, because both geniuses and criminals are non-conformists. The US is more individualistic and produces both. But, white collar crimes are far more common in Japan than in individualistic Denmark because we all descended from criminals, aka alpha males. The people in Japan are not likely to refuse if their bosses ask them to do something wrong. 88% of them said that they’d do it. Only 52% (!) in Denmark said that they’d do things for their bosses. People are weak and pathetic. They do not see this as wrong, and wouldn’t admit that the people who toe the official line are rascals. What we call crimes today, like murder, were strategies that helped people acquire status in the past. When the modern governments defined murder or burglary as a crime, what did people do? They channeled their criminal instincts into acts that are not too visible to the naked eyes of the mush-headed. 

What Pains You?

Meanie.

Income inequality is considered a social evil. But, it need not be true that income inequality is unjustifiable. It is perhaps true that some people are brilliant, and work harder. But, there are some clear-cut cases where this simply does not apply. Many workers can raise their income twenty folds by moving from a third world country to a western capitalistic democracy. A large majority of the people on the earth earns far less then they deserve because income is “locally determined”.  This is obvious, but few intellectuals take this seriously enough. Therefore, what pains them is not inequality.

Humility is considered a virtue. But, it is not clear that someone who has a modest opinion of himself accurately perceives reality. It is still possible that they are overestimating themselves. Hitler might claim that he had his flaws. It is not clear that someone who has a high opinion of herself is overestimating herself. Ayn Rand had once said that she wanted “The Fountainhead” to sell at least a hundred thousand copies. But, there are situations where it is perfectly safe to not rate yourself very highly. I think the world would be a better place if people were willing to trust the experts. Experts have spent decades studying subjects of which people know nothing about. They know more than the common public. But, when a common person disagrees with Milton Friedman, he is not likely to think that Friedman could be right. People do not value such humility. Therefore, what pains them is not lack of humility. Continue reading “What Pains You?”

What Do Our Journalists Say?

I have never read this before.

I have been hearing for long that reading the newspapers is the mark of a good boy. So, I have been reading the newspapers regularly to see what our salt-and-pepper-haired, intelligent people say. From what I hear, these are the people who know the ground reality. Their opinions do not come out of an ivory tower, like that of mine or that of academics.

But, when I read them, I feel that I have never read such highbrow English before. I have never read such lame theorizing before. But, it makes a lot of sense to read them because it is wrong to have such “prejudices”. It is wrong to dismiss people without giving their views a fair hearing. Let me read. I will begin with Mint-The WSJ, a newspaper of high editorial standards. Continue reading “What Do Our Journalists Say?”

Why I Write

“I have not written and published to please other people, but to satisfy myself, just as a cow gives milk, not to profit the dairyman, but to satisfy herself.”-H. L. Mencken

One of my most painful childhood memories is that of rising onto my toes, and asking my aunt whether we can make Onion-Vada’s without using onions.  She said, “I do not know what you are talking about. How do we make Onion-Vada’s without onions?” She was cutting onions and there were tears in my eyes. I did not like the taste of onions. I stood there, confused, watching the swift movement of her fingers. And, I felt that I could see the mist through the window.

I must have been three years old then, and she was still a teenager. I also remember that she used to call me a book-worm. When I used to insist that I wanted to join her when she takes her bath, she would raise her hand as if she was trying to smack me. She never did that, but I would then stare at her palms, hoping against hope that she did. It would have felt good. I remember someone who was unapologetic about it. I would then lie on the bed counting the marks of her fingers wondering whether it was all a dream, or whether it actually happened. Continue reading “Why I Write”

Samir Jain’s Times of India and Gail Wynand’s New York Banner

The Fountainhead

I read a very interesting essay on Samir Jain in “The Caravan”. It is hard to miss the parallels between the story, and the career of Gail Wynand in Ayn Rand’s “The Fountainhead. Samir Jain”s Times Of India is the world’s largest English language newspaper, in terms of circulation. Gail Wynand is my all-time fictional hero.

Gail Wynand was roughly based on William Randolph Hearst, a 20th Century American Newspaper publisher.

Do read:

Samir Jain, who will be 59 in March, has a capacious memory, and he recollects, nearly verbatim, much of what he has read. Strict rules of engagement govern Jain’s meetings, some of them even written out explicitly as instructions from Bennett, Coleman’s management and distributed to new editors. “You aren’t supposed to look at your watch, for instance.”

Without advice, assistance or plan, he began reading an incongruous assortment of books; he would find some passage which he could not understand in one book, and he would get another on that subject. He branched out erratically in all directions; he read volumes of specialized erudition first, and high-school primers afterward. There was no order in his reading; but there was order in what remained of it in his mind.  Continue reading “Samir Jain’s Times of India and Gail Wynand’s New York Banner”

A Confederacy Of Dunces

One of the hallmarks of this blog is that it holds every rogue up for “analysis”. There is of course, a reason. The greatest motivating factor behind this blog is admittedly Wimpy Kid’s foresight:

“Later on, I will have better things to do than answer people’s stupid questions all day long. So, this blog is gonna come in handy.”

The only sense in which my career is remarkable is that all the five bosses I have worked with in my life were willing to roast in hell forever if I were to join them. When I walk out of my apartment, I look back and forth to make sure my detractors are not hiding somewhere behind the bushes. My detractors tend to be shorter than me, but they also tend to have access to stronger goons. If they frame me, or get me killed, this blog is gonna come in handy. The readers and the police will know who all are deserving of some healthy suspicion. Continue reading “A Confederacy Of Dunces”

The Cure For Inflation

New Year’s day headlines in many newspapers was that the rise in food prices in India is at 19.83 percent.It is the highest in the decade and shows no sign of subsidence. Interestingly, The Finance Minister Pranab Mukherjee said that keeping a rein on inflation is a huge challenge for the Government. It is easy for the Government to blame businessmen, speculation and hoarding, and pretend that they are fighting inflation and managing “growth”, as money is a highly tangled economic subject. But, the real blame lies elsewhere. Prices would rise in general only if the money supply increases or the supply of goods come down dramatically. It is easy to find the culprit if one grasps the fact that a shortage of goods is an extremely rare occurrence and that it is not easy for an ordinary citizen to print money. Though the media uses loose terms like “food inflation”, inflation is everywhere, an increase in the supply of money and bank credit caused by the Central bank.

To understand inflation, one should first understand how money originated. In the past, a commodity (mostly gold or silver) evolved naturally as money through barter. For convenience, people kept the commodity in a deposit bank, which issued redeemable warehouse receipts, and these receipts started circulating as substitutes for commodity money. The Government seized the commodity and left people with fiat money which was made irredeemable through the abolition of gold standard, in course of time. As Ayn Rand wrote in Atlas Shrugged, “Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper.”

Money is manufactured in a complex process, in which government securities are purchased by the Reserve Bank of India (RBI), which is accompanied by the creation of new and additional checking deposits for the treasury. When the quantity of money is increased in this manner, too much money starts chasing too few goods and the purchasing power of money decreases, which leads to a rise in prices. It should be kept in mind that the rise in prices is merely an effect of inflation and the real cause is that the money supply has been “blown-up”, or overextended.

Inflation is purely a monetary phenomenon, no matter how hard the statists try to evade that fact. Intellectuals and politicians would want the public to believe that inflation is an act of God, over which we humans have but no control. Inflation however is a policy, and as any policy, it can be halted. Our government goes on with its inflationary policies because it wants to tax the public, but lacks the temerity to resort to it in so explicit a manner. Inflation is in fact a hidden tax everyone pays irrespective of their incomes. It is a tax, which hits the poor more than it hits the rich. The sections hit most by inflation are orphans, widows and the elderly who live on the buying power of life insurance policies, pensions and annuities. Inflation leads to a re-distribution of wealth from the poor to the state and its parasites.

If the gold standard and a free banking system were instituted, which means, if paper money were redeemable in gold specie, it would have put a rein on inflation. A century back, almost all economists believed in the gold standard. The governments all over the world have however, abolished the gold standard long ago to finance their policies of lavish spending and bribing the voters. The abolition of the gold standard led to the printing of currency recklessly, without any objective standards where the gold could have been the objective standard. The gold standard is the hallmark of a free society. If there was a gold standard in place, credit expansion would lead to an unfavorable balance of trade, and flow out of gold for the inflating country. The claim that gold standard is not flexible is just another way of saying that it prevents currency debasement. The fact that it is not flexible is precisely its merit. There is a long running propaganda from the part of economists of the establishment to make people believe that the gold standard has collapsed, and what we need is efficient monetary management. In the words of John Maynard Keynes, gold is out-dated, old-fashioned, a barbarous relic, an ancient fetish. What people failed to realize was that all this was mere propaganda fed by court jesters in order to persuade people not to use gold in real life. Gold standard did not collapse. It was destroyed using brute force and coercion.

Monetary management is simply a euphemism for continuous currency debasement. There would be no such thing as monetary policy in a world of sound, honest money. A year back, the Planning Commission deputy chairman Montek Singh Ahluwalia had said that there is no ’magic bullet’ to cure inflation. What he didn’t mention was that inflation was caused by the Central bank itself and that it could be cured to the extent it could be, through a free banking system and objective laws to make currency redeemable in specie. Nothing can be more ridiculous than the notion that the Reserve Bank of India, the institution that has created inflation in the first place has taken upon itself the task of taming inflation.

If one understands the real cause of inflation, the cure should be obvious. It is to halt the money printing press and institute the gold standard as soon as possible. The Reserve Bank of India should be abolished and a free banking system should be allowed to come into being. People often refer to Thomas Tooke’s dictum that “Free trade in banking is free trade in swindling.” Sadly, they are unable to see the apparent fact that a free banking system based on objective laws would put a halt to the inflation process. From the mid-eighteenth century to the first part of the 20th Century, when the United States was on a Gold Standard (It was not a fully consistent gold standard) prices steadily fell, year after year. If we are to adopt the Gold Standard, prices will fall continuously and boom-bust cycles would come to an end.

Price Fixing Means Chaos

A panel of experts appointed by the Government has recommended raising fuel prices. The panel, headed by Kirit Parikh, recommended a hike in domestic LPG by Rs 100 a cylinder and PDS Kerosene by Rs 6 a litre. It is not certain that what the panel called for will be implemented. Rangarajan Committee and the Chaturvedi Committee reports in the past went unimplemented. Many newspapers reported that the panel is for deregulating fuel prices? It is not at all evident that a Government orchestrated hike in prices would be a genuine deregulation. If these goods are underpriced, certainly, the hike would be a welcome move. A hike in prices will certainly reduce fuel subsidy burden.

The findings of the panel, it is said, will be unpalatable to the government battling inflation. An increase in fuel prices, however, can’t cause a general rise in prices. Only an increase in money supply would lead to “price inflation”. If fuel prices rise, people will cut down consumption of fuel or other goods. There will not be an increase in aggregate demand. There will be no “cascading effect on food prices”. When subsidies to maintain low fuel prices are removed, the prices of other goods might come down. It will also reduce the fiscal deficit. (A subsidy of over Rs 71,000 crores was given in 2008-2009, at the expense of the innocent, long-suffering tax payer.) Price controls, needless to mention, are not a solution to price rise. Government enforced price controls to deal with price rise, as several economists have noted, is like “trying to hold down expanding pressure in a boiler by manipulating the needle in the boiler’s pressure gauge”

Unfortunately, in India, the prices of fuels and fertilizers are administered by the Government? It should be obvious that no bureaucrat has the necessary information to set the prices of these goods. Lacking profit-loss signals, the prices set by the government would only be arbitrary. It is true that sometimes the market sets the price higher or lower than necessary to clear the market, but no one has the wisdom to correct these discrepancies. The market, left to itself will set this right. If fuel prices are higher than justified, it will send out the signal that it is profitable to produce fuel. More people will enter the market. The supply of fuel will rise. This will bring down the prices. If fuel is priced lower, producers will get the signal that it is not profitable to produce it. Some producers will leave the market. Soon prices will move towards a level which will clear the market. The market is self regulating.

It is important to recognize how the profit mechanism coordinates the market if we are to understand the harmful effects of price controls? Usually, price controls are thought of as a way to curb excess profits. But, in the market there is a tendency towards equalization of profits in all sectors. No sector can be more profitable than any other in the long run. If a sector is more profitable, there will be excess investment in two forms. One, more people will invest I the sector. At the same time, people already involved in the sector will plough back the “excessive” profits.

Government price fixing has harmful, unintended consequences? If the government sets the prices below the market level, there will be chronic shortage. Such a policy fails to take in account why prices are higher. Prices can be high only when there is an increase in money supply or a decrease in supply of goods. Price controls do nothing to cure inflation, which is purely a monetary phenomenon. When prices are set low, less people will produce the goods and the shortage becomes more problematic. The product disappears from the market, and there will be immense pressure on the Government to raise prices, if it is to cure the shortage. If the Government sets the price above the market level, it would lead to unsaleable surplus.

It is true that if the Government gets out of the price fixing business, there would be a sudden rise in prices. It might be painful to most people. But such short term pain is much better than the chaos price controls create. Shortages and unsaleable surpluses are just two such consequence of price fixing. There are several other consequences. Price controls create black markets. Customers become a menace to sellers. The quality of service comes down tremendously. People will have to resort to means of production which are expensive. There will be hoarding and delays in production. People will waste time standing in queues and searching for products. Price controls lead to further controls, and may ultimately lead to socialism, which will entirely wreck the economy. In short, Government price fixing creates chaos.